Exhibit 11-3 In Exhibit 11-3, the 100th unit of the resource is earning a resource price of
A)$10, all of which is economic rent
B)$10, none of which is economic rent
C)$4, all of which is economic rent
D)$4, none of which is economic rent
E)$10, some of which is economic rent

Question

Exhibit 11-3  In Exhibit 11-3, the 100th unit of the resource is earning a resource price of
A)$10, all of which is economic rent 
B)$10, none of which is economic rent 
C)$4, all of which is economic rent 
D)$4, none of which is economic rent 
E)$10, some of which is economic rent

Quizplus · Accepted Answer

In Exhibit 11-3, the 100th unit of the resource is earning a resource price of $10, which is the market price for that resource. Therefore, none of the $10 is economic rent as there is no scarcity value associated with the 100th unit of the resource. Economic rent only exists when a resource earns a price above its market value due to its scarcity.

Exhibit 11-3 in Exhibit 11-3, the 100th Unit of the Resource